messaging network to drive business value
Enhancing business efficiency is
By Garrett Gee, June 9, 2004Leveraging a network model
Information flow is the life-blood of a business enterprise. Companies continue to sharpen their focus on ways to streamline business processes and enable real-time data access to stay competitive. Cost-effective automation of order data transfers between buyer and supplier enterprise resource planning (ERP) systems are keys to eliminating data errors associated with manual processing of fax, e-mail, and phone purchase orders. Companies with customer and supplier data integration will also be able to work collaboratively to optimize their
supply chains to increase value for both enterprises.
Consider the telephone system. Pick up a phone and you have instant access to someone, whether they are ten blocks away or halfway around the world. Phone networks automatically route your call through a series of switches and relays to make an instantaneous connection. The network translates signals independent of the phone system on either end whether they are copper, fiber optic or wireless. Consider the communication potential if your phone could also recognize the country you are calling and simultaneously translate your conversation to the native language on the other end as you hear their conversation in your language.
Why is this important? Consider the telephone example if no phone network existed. Each person stringing wire or cable to everyone they want to talk with would rapidly become an impossible situation. Industrial networks today efficiently deliver phone, electricity, water and other services to communities throughout the world.
That is the power an industry network can bring to its members. Through a single connection, ERP-driven product order, demand and replenishment data from a buyer or supplier is automatically routed and translated to match the data format of the back-end systems of its business partner. An industry network hub accelerates value creation by standardizing non-competitive business processes to streamline operations and information exchange and facilitating the adoption of collaborative tools to eliminate excess inventory in the extended supply chain.
An industry network hub, shown in the figure, that can route and translate business data between suppliers and their customers - in their native data formats - enables truly effective inter-company commerce. Producers with visibility of the product demand across their customer base will be able to optimize their plant production and product inventory levels to effectively leverage working capital while in turn enabling their raw material suppliers to do the same. Buyers will know with confidence that their suppliers are taking cost out of their supply chain and reinvesting in the development of new products to support their business needs.Optimizing the supply chain
The fundamental imperative for an enterprise is to optimize the supply chains - make the right product at the right time at the right cost - a challenging proposition as global and regional market demands fluctuate. Never before have the stakes been higher.
Optimizing the supply chain requires integrating internal business processes and systems and linking them with customers to facilitate fast, effective decision-making between enterprises. A network hub using electronic messaging and standardized business processes is uniquely positioned to do this efficiently. The benefits are there for both supplier and buyer as there are far lower costs via a network than each company establishing and supporting their own independent connections.
Partner connections through a network enables a clearer picture of market demand, taking into account key events, and causal factors such as seasonality, economic conditions, promotions and pricing. Forecasting improvements will help reduce operating costs and cycle times, while increasing service levels. A solution built based on industry experience provides demand planners with a wide array of capabilities to automatically and manually fine-tune their replenishment plans to customers. Collaborative business processes with customers enables faster response to unplanned business developments that can impact product demand and shipments.
Network-based, modular supply chain and logistics applications can work in a variety of ways with ERP systems. Exception alerts can be tailored to mirror your business needs and processes allowing you to monitor only the exception transactions so that you can concentrate on more value-added activities. Network hosted applications with "proactive" event management technology directs companies to the most significant issues that need to be addressed between customers and their suppliers.
The global economic realities coupled with retailer and consumer demand mandates the continuous pursuit of higher efficiencies and flawless execution in delivery of materials throughout the entire value chain. Leading edge companies in many industries are achieving these types of results through business process improvement by leveraging the unique features and benefits of a global messaging
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About the author
Garrett Gee is Director, Commercial
Solutions at Elemica.
This article has been abstracted from a white paper
developed for the paints and coatings industry.